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Apple Blames China; China Blames Soros

Alan Murray
By
Alan Murray
Alan Murray
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Alan Murray
By
Alan Murray
Alan Murray
Down Arrow Button Icon
January 27, 2016, 7:28 AM ET
Apple Chief Executive Tim Cook gestures as he unveils the Apple Watch during an Apple event at the Flint Center in Cupertino
Apple Chief Executive (CEO) Tim Cook gestures as he unveils the Apple Watch during an Apple event at the Flint Center in Cupertino, California, September 9, 2014. REUTERS/Stephen Lam (UNITED STATES - Tags: BUSINESS SCIENCE TECHNOLOGY) - RTR45LGFPhotograph by Stephen Lam — Reuters

A slowing economy is showing up in corporate earnings reports this week. DuPont (DD) was particularly hard hit, reporting a sales decline of nearly 10% from a year ago, evident in all six of its business units and across all regions. Procter & Gamble (PG) also reported sales down 9% from a year ago, although it managed to boost earnings.

Even mighty Apple (AAPL) is suffering. Despite the company’s $18.4 billion profit – one of the most profitable quarters for any company ever – the company reported iPhone revenue that was up less than 1 percent from the same quarter a year ago. The company projected sales in the current quarter could be down from a year earlier. That suggests the meteoric rise of iPhone sales may be over. FORTUNE’s Philip Elmer DeWitt captures the company’s slowdown in four compelling charts.

Apple blamed its difficulties on a slowing Chinese economy. Meanwhile, the Chinese are blaming George Soros for their troubles. The 85-year-old investor, who has retired from the day to day operations of his family hedge fund, made some bearish comments on the Chinese economy in Davos last week, prompting a variety of “official” Chinese sources to attack him for declaring war on the Chinese economy.

As a side note, Apple said on its earnings call that it will be taking on new debt in order to fund shareholder buybacks and dividends. That’s a strange announcement from a company that is supposedly sitting on $216 billion dollars in cash – an amount equal to the Gross Domestic Product of Algeria. Trouble is, that money is in securities sitting overseas, and Apple can’t bring it home without huge tax consequences.

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About the Author
Alan Murray
By Alan Murray
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